The Dec. Unemployment Report

I was disappointed regarding the number of jobs created in Dec., 103,000. At the current stage of recovery, there should be many more jobs created.

People are dropping out of the workforce, driving the household unemployment rate down to 9.4%. Overall, this is a sign that companies are still not hiring.

It will be interesting to read Alan Abelson's analysis in Barron's to appear Sat. morning.

This is a quote from the WSJ that sums things up:

"'The good news in this report is that December caps off an entire year of job gains in the private sector,' said Heidi Shierholz, economist at the Economic Policy Institute, a union-backed think tank. 'The bad news is that, three full years after the recession officially began, we are still near the bottom of a deep crater.'"

Sparshott, Jeffery, 2011. Economy adds fewer jobs than expected. The Wall Street Journal, Jan. 7.

I think that previous estimates that full employment is probably not achievable before 2014 are correct. It might take even more than 6 years after the start of the recession to get American back to work.

Given the severity of the situation, I hope folks take a closer look when an asset bubble begins to form in the US economy.

The chilling thought is that China currently has an asset bubble and that things could implode like what happened in the US during 2008 (see Another Banking Crisis (China) in 2011?).

I think the US is in a better position to handle a financial crisis as compared to China.

Further, there continues to be serious concern regarding European sovereign debt. Default insurance keeps rising.

There is even concern about US financing needs in terms of the pool of money available to buy government bonds. I think this is a capacity constraint that requires close examination.